Leverage Effect of Supplier Management on Sustainable Procurement in Emerging Markets

...

social aspects is increasing in importance due to its impact on successful emerging

markets sourcing. Procurement managers are developing sustainability in their

procurement processes because of the growing importance of climate change and limited

resources as well as the potential of cost advantages. Procurement companies as well

take bidirectional positive effect of sustainable procurement and supplier management.

2. Literature review

International procurement has been studied extensively in literature by researchers (such

as Spekman et al., 1991; Birou and Fawcett, 1993; Herbig and O’Hara, 1996; Nellore et

al., 2001; Nassimbeni and Sartor, 2007, Javalgi et al. 2009, Maltz et al. 2011) to

determine the main motives and challenges regarding developing a procurement and

sourcing base in international environments and emerging markets.

Logistics and the supply chain management (SCM) are emerging as the critical success

factors for companies operating in the international arena, as increasing complexity

arises from a wider range of products, technological development, market growth and

the number of supply chain actors (Braithwaite and Christopher, 1991). At this point

performance evaluation of suppliers in selection and development phase will help

procurement companies to adjust objectives and success factors of the company with

suppliers (Chang, 2005). Krause and Ellram (1997) state that trust and reliance of

808

procurement companies on their suppliers to deliver technologically advanced, defect-

free products, in a timely, cost-effective manner necessitates supplier development

activities which is defined as; any effort of a buying firm with its supplier(s) to increase

the performance and/or capabilities of the supplier and meet the buying firm’s short-

and/or long-term supply needs.

Sustainable development is mentioned in the Brundtland Report as: ‘‘Development that

meets the needs of the present without compromising the ability of future generations to

meet their own needs’’ (WCDE, 1987). A study conducted by Harwood and Humby

(2008), presents that 20% of the firms viewed sustainability issues as their largest

supply chain risk and 25% of the firms required suppliers to adhere to social and

ecological standards in order to mitigate supply chain risks (Foerstl et al. 2010). This risk

mainly could be explained by procurement companies’ public reputation and its market

share by taking the responsibility of their suppliers in front of the public opinion.

Therefore integrating sustainability aspects (e.g. environmental and social aspects) in

supply process will help in determining new supplier selection and evaluation criteria

(Koplin et al. 2007). Koplin et al. explained the main trends affecting the relationship

between sustainability and supply management as the increasing strategic importance of

supply management and the awareness of the connection between supply decisions and

a firm’s environmental and social or sustainable performance. As a result, including

sustainability in procurement and supply management processes of the international

procurement company will help to reduce the environmental harms and social problems

which as well leverage the economic aspects of the company along the entire supply

chain.

3. Methodology

This survey has been conducted based on a questionnaire in three different languages:

English, Chinese and Turkish. This flexibility facilitated the companies’ participation and

enabled the project team to achieve a high response rate of 332 participants. Participants

of the survey consist of multinational companies from small and medium-sized

enterprises to global players. Buying companies are located in Germany, the USA, Brazil,

Turkey, Russia and China. German companies’ procurement headquarters have been

reached through the databases of the BVL and the TU Berlin. Non-European companies’

procurement headquarters and local procurement offices were reached via cooperating

partners’ contacts.

This study has different areas of key findings: The evaluation is carried out for three

main topics: trends and strategies in emerging markets, supplier management and

sustainable procurement. Results about successful concepts and strategies have been

classified into two different groups of respondents: overall companies which represent

total responses and Top Performer companies. The evaluation method is based on three

different